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Dividend Kings are stocks that have grown their dividends for at least 50 consecutive years.Many of the stocks that comprise the Dividend Kings are global conglomerates. These industry giants are also mega-cap stocks with market caps above $200 billion.But there are many smaller Dividend Kings that fly under the radar for most investors, but are strong dividend payers themselves.The following 3 Dividend Kings could be attractive stocks for dividend growth investors.
Gorman-Rupp Co. (GRC)
Gorman-Rupp began manufacturing pumps and pumping systems back in 1933. Since that time, it has grown into an industry leader with annual sales of nearly $700 million and a market capitalization of ~$1.1 billion.Today, Gorman-Rupp is a focused, niche manufacturer of critical systems that many industrial clients rely upon for their own success. Gorman Rupp generates about one-third of its total revenue from outside of the U.S.Gorman-Rupp posted third quarter earnings on October 25th, 2024, and results were weaker than expected on both the top and bottom lines. Adjusted earnings-per-share came to 49 cents, but that was six cents light of estimates. Revenue was essentially flat year-over-year at $168 million, but missed expectations by over $4 million.The gain in the top line was due to pricing increases that were put in place to help offset a decline in volumes. Gross profit was $5.27 million in the quarter, or 31.3% of revenue. This was better than the $48.1 million and 28.7%, respectively, achieved in the prior year period. The gain was due to a 240 basis-point improvement in cost of material, which was primarily attributable to higher selling prices.Adjusted EBITDA was $32 million, or 19% of sales. Both were gains from $30.5 million and 18.2% of sales, respectively, from the same period a year ago.Management boosted the dividend by 2.8%, its 52nd consecutive year of dividend increases. Gorman-Rupp’s payout ratio is 41% of earnings for this year following the most recent increase in the dividend, which indicates a secure dividend payout.
Middlesex Water (MSEX)
Middlesex Water Company was formed in 1897. The company is a water and wastewater utility in New Jersey and Delaware. Its market capitalization is $1.2 billion. Middlesex has paid consecutive dividends since 1912 and has reached its 52nd consecutive year of dividend increases.Middlesex Water Company posted strong financial results for Q3 2024, with diluted earnings per share increasing by 42.9% to $0.80 and revenues up 17.95% year-over-year to $55.1 million. The revenue growth was driven by an $8.4 million increase primarily due to an NJBPU-approved base rate hike effective from March 2024 and increased customer demand, especially in the Middlesex System and Delaware operations.Year-to date, the company reported a net income increase of $9.8 million to $35.5 million and EPS of $1.98, with substantial gains from the base rate increases and a $6.8 million recovery related to water treatment investments.The company continues its 52-year streak of dividend increases, with a 4.6% increase announced.Earnings-per-share have been rising steadily over the past decade. We see annualized earnings-per-share growth for the next five years in the mid-single-digits, as the meaningful sources of growth will be the rate increase in New Jersey and inflationary pressures. Adding customers will also improve operational efficiencies through economies of scale.
Tennant Co. (TNC)
Tennant Company is a machinery company that produces cleaning products and that offers cleaning solutions to its customers.In the US, the company holds the market leadership position in its industry, but the company also sells its products in more than 100 additional countries around the globe.Tennant Company reported its third quarter earnings results on October 31st. The company announced that it generated revenues of $316 million during the quarter, which was 4% growth from the same quarter last year.This was slightly better than the recent trend, as revenue had grown less on a year-over-year basis during the previous quarter. Tennant Company generated adjusted earnings-per-share of $1.39 during the third quarter.Tennant Company has plans to grow its sales inorganically, especially in the Asia/Pacific region, where it benefits from above-average market growth rates. The takeover of Chinese cleaning equipment company Gaomei improved Tennant’s sales outlook in the Chinese market, as well as in other Asian markets.Tennant Company is the leader in the US cleaning machines market. This serves as a competitive advantage, as Tennant Company’s market leadership allows for better economics of scale and a superior sales network compared to its peers. TNC has increased its dividend for 54 consecutive years.More By This Author:10 High Dividend Stocks You’ve Never Heard Of
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